TUI AG ahead of plan proposes a dividend of 15 cents per share for financial year 2012/13

Friedrich Joussen: “We are fully on track with oneTUI”

Hanover,
18 December 2013

The TUI Group closes the financial year 2012/13 with a good operating result, despite the one-off expenses for the oneTUI programme, and is planning to resume dividend payments for the first time since 2007, with a payout of 0.15 euros per share. The oneTUI business excellence programme, initiated by TUI AG CEO Friedrich Joussen in May 2013, is progressing well.

Friedrich Joussen: “We deliver on our promises: We will create value for our shareholders, turn TUI into an attractive investment and offer secure jobs for our employees. Our good operating results and virtually debt-free balance sheet enable us to pay a dividend to our shareholders earlier than promised.”

In the framework of his 100-day review, Joussen had announced that financial year 2012/13 was going to be a year of transition on the path towards resuming dividend payments. “The restructuring measures associated with oneTUI have created one-off charges in our accounts. However, the measures of my strategy programme have already taken effect. I am therefore very confident that we will achieve the goals we have set ourselves of generating a net cash flow of around 100 million euros at TUI AG and underlying Group EBITA of around 1 billion euros in financial year 2014/15,” said Joussen. The one-off charges resulting from oneTUI included the known write-down on the Castelfalfi project in Tuscany, provisions for Hapag-Lloyd Kreuzfahrten and expenses for the social plan concluded in the summer of 2013 for the restructuring of the Group holding (Lean Holding).

In the period under review, Europe’s leading tourism group generated a slight increase in turnover to 18.5 billion euros (previous year 18.3 billion euros). The operating result (underlying EBITA) grew by 2 per cent to 762 million euros (previous year 746 million euros). Despite the known one-off charges from the oneTUI programme, the Group result before minorities rose by 31 per cent to 186 million euros (previous year 142 million euros). Adjusted for the one-off effects associated with oneTUI in the transition year, earnings per share totalled as much as +0.18 euros. Even on a non-adjusted basis, earnings per share rose from -0.16 euros to -0.08 euros. This development shows that oneTUI is taking effect. The Group’s net debt was further reduced: It totalled 68 million euros as at the balance sheet date (previous year 178 million euros).

TUI provides a positive outlook for the current financial year 2013/14. The Executive Board expects slight turnover growth of 2 to 4 per cent, driven in particular by the expected increase in customer numbers in TUI Travel’s Mainstream Business. The operating result is expected to rise by 6 to 12 per cent in total as a result of an improved business performance across all Sectors. Due to lower one-off effects, which decreased as expected, and improved operating results, we expect reported earnings (EBITA) to grow by 16 to 23 per cent.

In the period under review, TUI Travel posted turnover growth of 0.6 per cent to 17.8 billion euros (previous year 17.7 billion euros); adjusted for foreign exchange effects, turnover rose by 2 per cent. While customer numbers declined by around 3 per cent, the turnover growth was driven by a higher proportion of differentiated product. The operating result improved by 0.5 per cent to 641 million euros (previous year 637 million euros) despite negative foreign exchange effects. On a constant currency basis, the result would have risen by 8 per cent (to 689 million euros). This was mainly attributable to the sound business performance in the UK, Germany and the Nordic countries. The operating result also benefited from the cost savings generated in the framework of the business improvement programme.

Hotels & Resorts – Higher operating result

TUI Hotels & Resorts posted total turnover of 826.6 million euros, matching the prior year’s level (826.0 million euros). Due to overall sound demand, both occupancy and average revenues per bed improved on slightly reduced capacity. The operating result of TUI Hotels & Resorts grew by 10 per cent to 197 million euros (previous year 179 million euros). The growth was driven by the sound operating performance of the hotel brands Riu and Robinson and the disposal gain from the sale of a Riu hotel.

The Cruises Sector comprises two brands: Hapag-Lloyd Kreuzfahrten and TUI Cruises (measured at equity, turnover not recognised). The turnover of Hapag-Lloyd Kreuzfahrten grew by 13 per cent to 261 million euros (previous year 231 million euros). This was mainly attributable to the expansion of the fleet to include Europa 2 in May 2013. The Cruises Sector reported a considerable decline in its operating result to -13.9 million euros (previous year +3 million euros). While TUI Cruises continued its very positive performance, Hapag-Lloyd Kreuzfahrten posted lower earnings due to the start-up costs for the market launch of the new Europa 2 and damage caused by a fire on board the Hanseatic during a dry-dock stay. Due to the commissioning of Europa 2, the Hapag-Lloyd ships recorded a load factor of 70.6 per cent, down on the prior year’s level of 77.4 per cent. As a result of the expansion of the fleet, the average rate rose from 399 euros per passenger per day to 420 euros. TUI Cruises again increased its occupancy to 101.8 per cent (previous year 100.9 per cent). The average rate per passenger per day was 157 euros, up on the prior year’s level of 151 euros. TUI Cruises will continue its growth path in the market segment of premium cruises with the commissioning of Mein Schiff 3 (May 2014) and Mein Schiff 4 (early summer 2015).

Development of turnover

€ million

2012/13

2011/12

Var. %

Tourism

18,460.1

18,297.2

+ 0.9

TUI Travel

17,796.0

17,681.5

+ 0.6

TUI Hotels & Resorts

403.1

384.7

+ 4.8

Cruises

261.0

231.0

+ 13.0

Central Operations

17.4

33.1

- 47.4

Group

18,477.5

18,330.3

+ 0.8

Development of Underlying EBITA

€ million

2012/13

2011/12

Var. %

Tourism

823.8

819.0

+ 0.6

TUI Travel

640.5

637.4

+ 0.5

TUI Hotels & Resorts

197.2

178.6

+ 10.4

Cruises

- 13.9

3.0

n/a

Central Operations

- 61.9

- 73.3

+ 15.6

Group

761.9

745.7

+ 2.2

Development of EBITA

€ million

2012/13

2011/12

Var. %

Tourism

673.0

619.3

+ 8.7

TUI Travel

532.8

441.0

+ 20.8

TUI Hotels & Resorts

170.6

177.5

- 3.9

Cruises

- 30.4

0.8

n/a

Central Operations

- 78.2

- 80.5

+ 2.9

Group

594.8

538.8

+ 10.4

Income Statement of the TUI Group

€ million

2012/13

2011/12

Var. %

Turnover

18,477.5

18,330.3

+ 0.8

Cost of sales

16,436.3

16,285.8

+ 0.9

Gross profit

2,041.2

2,044.5

- 0.2

Administrative expenses

1,557.3

1,555.7

+ 0.1

Other income/other expenses

+ 26.3

+ 71.1

- 63.0

Impairment of goodwill

8.3

13.8

- 39.9

Financial result

- 235.7

- 284.7

+ 17.2

Financial income

124.0

159.9

- 22.5

Financial expenses

359.7

444.6

- 19.1

Share of result of joint ventures and associates

59.3

- 8.7

n/a

Earnings before income taxes

325.5

252.7

+ 28.8

Reconciliation to underlying earnings:

Earnings before income taxes

325.5

252.7

+ 28.8

plus: Loss on Container Shipping measured at equity

22.3

49.0

- 54.5

less: Gains on reduction and measurement of financial instruments with Container Shipping